Disclaimer: This is general information only and not legal advice. Consult a licensed Vermont attorney to get advice about your specific situation.

Overview — what this process does

When a foreclosure sale produces money in excess of the amount owed (a “surplus” or “overage”), state law and court procedure determine who gets that money. Recovering surplus funds in Vermont usually requires filing a special proceeding in the Superior Court where the foreclosed property is located. The proceeding asks the court to declare who is entitled to the surplus and to order distribution of the funds.

Step-by-step: how to file a special proceeding to recover a foreclosure surplus in Vermont

1. Confirm there is a surplus and get the sale paperwork.
   • Obtain the sheriff’s deed, sheriff’s sale report, or court sale record showing the final sale price and distribution of proceeds. These documents are filed in the civil docket for the county where the property is located.
   • If the surplus is already in the clerk’s or sheriff’s custody, find the docket entry or notice that identifies the amount and where the funds are held.
2. Identify potential claimants and priority.
   • Typical claimants include the former owner (equity owner), junior lienholders, tax authorities, or parties with recorded liens. The court will sort priorities under Vermont property and lien law.
   • Search land records and the foreclosure docket for recorded liens and mortgage priority information. Contact the town clerk or use county land records to verify.
3. Prepare the special proceeding (petition/complaint).
   • Title the filing as a special proceeding or as a motion/petition for distribution of surplus proceeds in the Superior Court (Civil Division) in the county where the property sits.
   • Include: a clear caption (court name, parties), a concise statement of facts (mortgage, foreclosure sale, sale price, amount of surplus), the claimant’s legal basis for recovery, an itemized statement of the amount you request, and a request for relief (judgment ordering payment of the surplus).
   • Attach supporting exhibits: sheriff’s sale report, sheriff’s deed, mortgage and lien records, payoff statements, identity documents, and any affidavits proving your claim.
4. File in the right court and pay fees.
   • File the special proceeding in the Vermont Superior Court in the county where the real property is located. Follow local filing rules and pay the required filing fee (check current fee schedule with the court clerk).
   • If the surplus is relatively small, ask the clerk whether the court provides an expedited or simplified form/procedure for surplus claims.
5. Serve notice on interested parties.
   • Serve the petition and any court notices on all persons and entities with a recorded interest or known claim: prior owners, holders of recorded liens, the foreclosing mortgagee, the sheriff, and any tax authority that may have a lien.
   • Follow Vermont rules for service (personal service, certified mail, or other methods allowed by court rule). The court may require proof of service before a hearing is scheduled.
6. Attend the hearing and present evidence.
   • Bring originals and copies of all documents, witness affidavits if necessary, and a clear accounting showing requested distribution of surplus funds.
   • Be prepared to explain why your claim has priority (for example, you are the former owner, or you hold a subordinate lien that remains unpaid).
7. Obtain a court order and receive payment.
   • If the court finds your claim valid, it will enter an order/judgment directing the clerk or sheriff to pay the surplus funds to the entitled party.
   • The clerk or sheriff will follow the order for disbursement. If other claimants appeal, the funds may remain in custody until appeals conclude.
8. If you cannot find or claim the funds, check unclaimed property options.
   • If the surplus goes unclaimed, funds may be turned over to Vermont’s unclaimed property office. Search the Vermont Treasurer’s unclaimed property database or file a claim there if applicable.

Common documents to prepare and file

• Sheriff’s deed, sale report, and any foreclosure pleadings from the court file.
• Title search / copy of the chain of title showing your interest.
• Recorded mortgages, judgments, tax liens, and releases (if any).
• Affidavit or sworn statement establishing your identity and entitlement to the funds.
• Proposed order or form of judgment for distribution of surplus funds.
• Proof of service certificates for each party served.

Timing and common deadlines

Deadlines vary by county and by the specifics of the foreclosure. Typical items to watch:

• Service windows: courts usually require adequate notice to interested parties before a hearing; verify local rules for exact timeframes.
• Appeal windows: any party dissatisfied with the court’s distribution order may have a limited time to appeal. Ask the clerk for the appeal deadline when the order is entered.
• Unclaimed funds timeline: funds not claimed may be subject to turnover under state unclaimed property rules after specified retention periods.

Useful Vermont statutory and court resources

Consult these official resources for further detail and the most current rules and statutes:

• Vermont Legislature — statutes by Title: Title 12 (Courts and Judicial Procedure) and Title 27 (Property & Conveyances): https://legislature.vermont.gov/statutes/title/12 and https://legislature.vermont.gov/statutes/title/27.
• Vermont Judiciary homepage and court procedures (filing rules, local practices, and forms): https://www.vermontjudiciary.org/.
• Vermont Treasurer — Unclaimed Property search and claim information (if surplus proceeds are turned over): https://treasurer.vermont.gov/individuals/unclaimed-property.

When to get help from an attorney

Consider hiring a Vermont attorney when:

• Multiple parties claim the same surplus or priority is unclear;
• Large sums are at stake and the facts are contested;
• You need help locating hidden liens or tax claims;
• The foreclosure file is complex or the opposing party has counsel.

Helpful Hints

• Start by obtaining and reviewing the entire foreclosure court file — that file often contains the sale accounting you need.
• Document identity clearly: courts require good proof of who you are and your relation to the property.
• Search county land records and UCC filings to find other claimants before filing. Missed lienholders can complicate or delay distribution.
• Keep copies of every document you file and the proofs of service; missing proof of service can delay a hearing.
• Contact the clerk’s office early to confirm local filing procedures and fees for special proceedings in that county.
• If funds were transferred to the state unclaimed property office, follow that agency’s claim process in addition to, or instead of, a court petition.
• If you cannot afford an attorney, ask the court clerk about self-help resources or local legal aid programs that assist with civil matters.